If you're at these 5 critical points in your life, then you need a financial advisor.

It is common that people seek professional attention when confronted with problems beyond their managerial capacity. When we feel sick, we seek the attention of a medical doctor. When the car changes sound, we look for a car mechanic. When arrested by law enforcement agents, we reach for a lawyer.  When the furniture is not standing upright, we look for a carpenter. The list is exhaustive. But when confronted with financial issues, most people think it's personal and they can figure it out. It's difficult, especially in this part of the world to seek the assistance of financial advisors. But statistics shows that most of the challenges faced by people in the world today is rooted in money or money related issue. Most failed marriages today are consequences of money issues gone bad. Companies are folding up on a daily basis. Individuals and businesses are running into debt owing to bad investments. Most crimes committed today are because of financial pressure. There can't be a better time to seek professional advice.
Who then is a financial advisor?
According to Investopedia, a financial advisor (or adviser) is a professional who provides financial guidance to clients based on their needs and goals. Typically, they provide clients with financial products, services, planning or advice related to investing, retirement, insurance, mortgages, college savings, estate planning, taxes and more. Below is the best time to engage one.

You just got a job: Getting a job marks the beginning of a steady cash flow for many. But one thing about this cash flow is that it is not permanent. It must surely end either through resignation, retrenchment or retirement. This cash flow should be properly channelled in order to make something reasonable out of it. Poor financial decisions are inevitable if you don't get sound financial advice. The proper thing to do is to have a plan and meet a financial advisor to assist you draw a road map on how to actualize those plans. Nothing works successfully without a detailed plan and an unwavering commitment to stick to the plan.

You just inherited an asset: If a loved one has passed and you're expecting to receive an inheritance, you may have a number of questions about the process; such as is the inheritance taxable and what to do after receiving the inheritance. Depending on your goals and what type of asset you inherited, your options may vary. At this point, you need the assistance of seasoned financial advisor. Transferring wealth from one generation to the other is difficult in this part of the world. Most people that inherited some form of investment end up mismanaging it. This is a consequence of lack of guidance by a financial advisor.

You just got married: Getting married is an exciting time in life but it can also be a time of significant financial change and stress. First there is the cost of the wedding itself- and the budget you'll have to tie yourself to so you can have exactly the wedding you want. Then, when the honeymoon is over, there's life ahead with all the financial decisions you'll make together as a newly married couple. Also bear in mind that sooner or later, you'll become parents. Raising children places financial obligation on parents. There's no better time to see a financial advisor.

You want to raise capital for your business: Have you ever tried to get a loan from Financial institution for your business without success? Have you tried to get equity capital for your business only to be turned down by investors? There may be something you're doing wrong. You see there are some critical information these capital providers are looking for in your books that'll determine if they're going to provide the much needed capital or not. Financial advisors understand this better than you and the earlier you engage them to assist you, the better.

When you want to make big investment: Most persons find themselves in a quandary when it comes to investment. Some start to ask; do I buy shares, funds, piece of real estate, commodities etc. If you're thinking of investing in the above-mentioned products, you may feel confident to buy them directly from a broker or fund without taking advice. However, these products are harder to understand than cash savings products, and by not taking advice, you may not be considering all of the options available to you. There's also a risk that you may buy a product that's not suitable for you because you don't understand it. Advice can help you buy a better product than the one you choose yourself. An advisor will also have the expertise and knowledge to find better options, as some products are only available if you go through an advisor.

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Can you earn in your sleep? Absolutely yes! Here's how..

You work hard for your money, yet your paychecks won’t cover your costs forever. Whether you’re looking to retire or simply to start having some of that hard-earned money do the heavy lifting for you, you probably want to start looking for ways to earn passive income.

Passive income -- or money you earn while you sleep -- can become a tool you can use to cover your costs. That will allow you to focus more of your time on things you want to do rather than on earning money just to assure you have a roof over your head, clothes on your back, and food in your belly. These seven approaches will let your money do much of the work of earning more money for you.

1. Own dividend paying stocks.
When you buy a typical share of stock, you become a partial owner of that business. As a partial owner, you get your portion of the rewards of that ownership. That includes any dividends the company declares and pays based on its earnings.
The company’s employees do the hard work of earning the money for you. As a shareholder in a successful dividend paying company, you simply sit back and collect the cold, hard, cash rewards from the financial risk you’re taking with your money

2. Own rental real estate.
Land lording is a time-honored approach to generating cash. Particularly once you’ve owned a property for a while or if you have the ability to invest in real estate with multiple tenants, it’s quite possible for your rents to well exceed your costs of owning the property.
That said, direct real estate ownership isn’t entirely a passive business. You need to find tenants, take care of maintenance and repairs, sometimes be a bit assertive in collecting the rent, and be able to manage through periods of vacancies.
If that sounds too much like work for your idea of passive income, you can either farm out operations of your real estate to an external partner or you can invest in publicly traded real estate companies. Real Estate Investment Trusts (REITs) are businesses that specialize in owning or financing real estate investments. They are required to pay at least 90% of their income as dividends to maintain their pass-through tax status, which typically leads to higher yields than ordinary stocks offer.

3. Be the silent partner in a business.
Many businesses -- particularly in the energy sector -- are structured as limited partnerships. In such a business, the limited partner shares in the profits of the business but generally has no actual responsibility for its operations. In effect, the limited partner provides financial support, while the other side of the partnership -- the general partner -- runs the day to day operations while also sharing in the profits.
The thing to remember with limited partnerships is that they are pass through entities. The partners are responsible for paying taxes on the income the partnership earns, whether or not they actually receive a dime of that income in the form of a distribution. As a result, most publicly traded limited partnerships tend to pay high distributions, to encourage investors to become partners despite that tax situation.

4. Loan money to a company or government
If you want an investment that’s lower risk than owning part of a business, consider lending money to that same company instead, and receive interest income in return. A company’s bonds take a higher priority in the capital structure than its stock does. Indeed, defaulting on a bond interest or principal payment will typically trigger a default, which could cede control of the company from its stockholders to its bondholders. That makes it incredibly likely that if a company can pay its bonds that it will pay its bonds.
If even that seems too risky, you can also loan money to governments, including the Nigeria Federal government (through FGN bond) which has the ability to print money to pay its bonds if it needs to do so. Note, though, that whether you’re loaning to a company or to a government, the tradeoff is that for the lower risk associated with lending vs. ownership usually comes a lower overall expected rate of return.
Of course you can't be quite successful in this regard without the assistance of a reputable asset manager that understands your situation and knows exactly the financial instruments that can take you from where you are to where you wanna be. Moreover as a beginner, it's important to start with what your risk level can accommodate. Mutual funds may be the best place to start. The mutual funds with competitive rates can be a bit difficult to get. I'll recommend Abacus money market funds managed by Investment One Financial Services. Contact me on nnamdinkemakolam@yahoo.com for more information on mutual funds, though I'll make a write-up on that.

5. Write options for premium income
On the flip side, if you’re willing to partake in high risk investing, you can write (sell) options to collect the premiums as income. Option buyers pay an additional premium -- known as the time value -- for the right to either buy or sell a stock at a given price on or before a given date. The option writer collects that premium and gets to keep it regardless of whether that person has to make good on delivering or accepting the underlying stock.
Note that collecting that premium is far from a free money investment, however. Options are a leveraged investment, and it’s entirely possible to lose more money than you invested in some option strategies if the market moves against you.

6. Pay off your debts
If you’re in debt -- any kind of debt -- paying that debt off may give you the biggest effective raise of all. Remember that when you’re paying on your debt, you typically pay both interest and principal. The interest is money you’re paying above and beyond what the item would have cost you in the first place had you paid cash up front. The principal payment represents cash flow out of your pocket that you free up to put towards another use once it’s no longer tied to that debt.
While paying off your debt isn’t technically the same as earning money, at the end of the day, it has the same effect on your wallet. After all, money you’re no longer putting towards debt service is money you no longer have to have coming in to cover your costs of living. That gives you more breathing room with your available cash or frees you up to not have to work that much harder to cover your remaining costs. Either way, it represents money doing the hard work for you, giving you more control over your life.

7. Find a fun side hustle that pays you to do what you’d do anyway
Ok, for this one, you’ll actually have to technically do a little bit of "work." Still, if you can find a way to get paid to do something you love doing anyway, you can earn money without it feeling too much like work. For instance, if helping others get in control of their money is a passion area for you, this role as a personal finance writer may be a great opportunity to get paid to do what you’d willingly do for free anyway.
Likewise, sites like Twitch offer you the opportunity to build an audience that will get you paid to play video games. While only a (very) small percentage of those on the site will make enough at it to make a living, if you can legally pick up some spending cash for doing something you’d be doing for free, why wouldn’t you?

More money in your pocket, more time in your day
When all is said and done, you work to cover your costs of living and hopefully have a little something left over to enjoy the rest of your time. The more you earn when compared to your expenses, the greater your opportunity to enjoy more of those 24 hours we all get in a day.
Whether you’re putting your money to work for you, getting rid of the debt service costs that take away the money you’re earning, or figuring out how to get paid to have fun, the end result is largely the same. You get more control over your time and better financial flexibility in your life, and you can put that much less effort into the drudgery of a job you’re doing just to pick up that paycheck. Sounds like a win, no matter how you get there.

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Business killers in Nigeria

After taking critical surveys about business. I did a lot of researches on various business men and women, I studied their growths and downfall and I came up with this great business killers. Please be very concious about them.
1.POOR BUSINESS BACKGROUND : if you will agree with me. Many people just jump into business because they liked it, some was because they see another person making huge profits from it, some were influenced by friends or relatives. Only few had the full background knowledge of the businesses. I was at a computer centre weeks back and I saw a woman who brought her son for computer training. I was surprised when the operator told her to bring 3,000 for 3 months training. I asked him after the woman’s departure that did he attended any computer training before setting up this business?, he replied that “not at all, I practised it on my brother’s computer and I became an expert”. I replied“no wonder” and said nothing. Because ordinary desktop publishing should go for nothing less than 6,000. Especially for 3 months.
2.POOR ENTREPRENEUR SPIRIT: many people has the money and idea to set up a business but the entrepreneur spirit is lacking. The spirit to keep business moving even out of season, the spirit to stand firm during challenges and the spirit to maximise. The spirit to take risks, The spirit to withstand insults from customers and threats from competitors, the spirit to face challenges. That’s why most people fold up business when the flows they foresaw wasn’t coming in as they expected. I will encourage people in this category to read books about successful entrepreneurship.
3. POOR MARKETING STRATEGY: many people do business without efficient marketing. I was looking for where to take an urgent passport one day. I asked 3 people in that street about where to get a passport photographer and no one could direct me. It was the 4th person that pointed to a shop closer to me. I was surprised because I had passed the shop without knowing something like that was been operated there. I got there and took the passport. I asked him, “why not get a good advertisement signboard to show passersby that you run this business?” I was shocked when he replied me that “is it ontop this my kobo-kobo business I go put signboard?, besides, state government will charge me 10k every year, and I can’t affordit”. I was like WTF?, a good signboard will attract more than 10 people daily to patronise you beyond your neighbourhood but he was “inconvinceable”. A business without strategic marketing and advertisement will render the growth of the business stagnant and slow. Ask seun osewa, he dey advertise, that’s why you would see “HOW TO PLACE TARGETED adson nairaland” because the more the awareness, the more the income flow.
4. POOR SPENDING HABBIT: as a good businessman, especially the newbies, you have to be concious of the way you spend, your spending should be from your profits and not your capital. And for a better business growth, 40% of your profit should be added to your next capital. Otherwise, you will remain in your first capital capacity till Buhari leaves aso rock..
5. POOR SAVING HABBIT: no matter how small the business is, always cultivate a non-withdrawable savings in your rainy seasons. You can never tell what the future holds. You might need to diversify your business in future, repair generators, pay bills and you might suddenly impregnate a poor man’s daughter. So this savings will save you during the dry seasons.
6. FAMILY AND FRIENDS: yes!!, here comes a great business killer. When you are doing business, always set a boundary for your family and friends. Let them pay for the services rendered to them most especially when the money is needed to get another goods. The good news is that, if you keep rendering free service to friends and family especially as a newbie in the business, you mite go broke and run dry. The same friends and family will be the first to insult you saying “look at that goat, he started business last year and folded up this year” forgetting the fact that they contributed to your downfall.
7. POOR TIME MANAGEMENT: you will all agree with me that “Time na money” do your work when you are supposed to work, spend much of your time strategizing on expansion than the time you use on social networks to catch fun, unless you are there for business purpose. Remember, social network owners are making their money from your poor time management.
8. EXCESSIVE DEMANDING RELATIONSHIP: you will agree with me that some girlfriends are so cruel when it comes to money demands. They can demand money more than your profit at a go. Some don’t care about how you make the money and the need on ground to keep business moving, all they always wanted is financial satisfaction. I don’t need to advice you on this area. When your shop folded up, they will dump you for a fresh rich guy. And bros,don’t waste your time cursing them, it will not have any effect because you weren’t robbed. Remember the lyrical Amaka that always disappoints 9. SELFISHNESS ON BUSINESS IDEAS . After making a lot of researches on numerous dead companies. I came to realize that so many CEOs were very selfish about the ideas of the business they run, they don’t disclose it to family and co-workers. Though it has its advantages in terms of competitors. But what happens when you fall sick or die?, who will succeed the seat of the CEO?, is he/she properly trained on how to keep the business going?.That’s why when I checked the operation of Yahoo, Google, Facebook etc, there is no special office of the CEO, the owners work together plainly with many staffs as a BOARD. They open ideas to one-another and the organisation will keep moving because the blueprint is opened. Unlike the africolas and time-colas of Nigeria.
10. THE GOD FACTOR. If you are a christian, muslim, atheist, or traditional worshipper, there is always this “supreme-being” factors that you have to always call on for the spiritual business growth. If you know how far and long your competitors goto carry sacrifices, going on fast and prayers, visiting pastors , babalawos and imams just to outshine you in that business,then you would know how to involve your own supreme being whom you believe in..

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Woman, please invest!

I listened to Sade Adu’s ''sweetest taboo’’ recently and nodded my head in soothing appreciation to this old classic tune. What ever happened to fine music of the 80’s? They don’t make music like this anymore.

Sade has great talent backed with amazing vocals and wish she would release another inspirational album soon. Women are doing big things these days and more women are breaking barriers.

The world is fast changing, just like the investment world is rapidly changing but sometimes wonder why few women invest in the stock market. Seriously, the old days of putting money in a savings account and watching its slow interest growth drowned by a higher inflation rate is over.

We are in the age where technology keeps blowing the minds of many, and an artificial intelligence app can monitor all your investments and trigger when to hold or sell.

“I am afraid that I will lose my hard-earned cash”, is actually the most common answer I receive when I ask a woman why she keeps all her money in a savings account. Sometimes, she may continue by saying “I can’t be bothered really, I can just pile it up in my account, that way I know it is safe’’.

Others will say ''The market is unwelcoming, male dominated and full of jargon’’ while some even feel the investment services advertised all around are not aimed at them. This is why an investment service aimed solely at women to educate them about finance and investing will do well in Nigeria.

Some women think this is a risky thing to do and would rather remain in their comfort zones. A comfort zone is a beautiful place to be, but nothing ever grows there. In life, you have to grow and evolve, just as the world evolves around us. Do not remain static, else, the world leaves you behind.

The major reason why I invest my money in the stock market instead of leaving it in the equivalent of cash in my bank account is because I am so risk averse. Following my educational and experience, I believe a woman who doesn’t invest is actually taking on more risk than I do, because if she loses her job for example, she probably would have nothing else that would generate income for her. She then dips her hands into the savings till it probably dries up. What if her husband is facing a similar challenge and unable to sustain her? It becomes a battle.

Also, according to the National Bureau of Statistics, Nigeria’s inflation rate has been dropping consistently for the past four quarters. Inflation is an economic tax and if you put money in a savings account, the economic tax you pay exceeds the return from your savings account. To ensure that your return is higher than the economic tax you pay, it is wise to put your money in an investment that pays you more money with more favorable returns.

The first step is to make up your mind that investing in stocks is an area you would like to explore, and then take up steps to learn about it. With this mindset, you will be on your way to having a winning portfolio.

Here, we equip you with tutorials, recommendations and market news to help you become a seasoned investor. Fear not woman, take up the challenge.

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Don't entertain fear

I saw the movie ‘’Justice League” recently and it delivered just what it promised; excitement, adrenaline rush and the desire for more. I am not usually a movie fanatic, but this by far surpasses any fictional movie I have seen in a while. I hear Thor is good too, but I am yet to see that.

Justice League is basically about the formation of an unprecedented league of heroes who recruit a strategy to fight against a newly awakened enemy who has tried to instill fear and pain into citizens of that nation while stealing their mother boxes. The mother boxes are major sources of power and unity and the enemy stole this before they formed the rescue league to retrieve them back to their community.

Fear is healthy. It is an essential instinct that has kept humans alive. We all know that gut-level feeling of fear, followed by a reaction of fight or flight. When fear strikes in the investment world, we often see investors trip and stumble as the urge to flee takes over. A race for the exits can be costly, and with the benefit of hindsight, is often the wrong reaction.

When the market gets scary what other option can one employ rather than fleeing the scene? People new to investing in stocks associate it with intense feelings of fear and stress. Investing in anything, especially the stock market, when you don’t know anything can be scary and incomprehensible. Learning how to invest and understanding what you are investing in will give you the confidence you need over time to start putting your money into the stock market.

When a car is overheating for example, and suddenly goes up in flames, there is a natural instinct of fear and flight for safety and self-preservation, but not all unsettling situations require flight. If we immediately run from every loud or unfamiliar noise, we would probably be on the run all day long.

Imagine waking up on a Saturday morning and the first headline you read in the dailies is ‘’ Largest investment bomb, profits vanish’’, that would scare any investor and prompt irrational action. However, the thoughtful investor puts these scary events into perspective and processes the facts, before taking action.

There are a few tips you can use to eliminate fear, and subsequently become a successful investor in Nigeria and around the world. The first tip is to educate yourself. Having knowledge is an essential asset to becoming successful. When you are educated on the market, and learn what to watch for, you will gain an understanding of when to buy and sell and feel more comfortable making decisions.

You need to set reasonable goals. Ask yourself this question: Where do you see yourself in five years? Setting goals allows you to overpower fear with determination. Once your desired outcome is set, you put yourself in a compelling and motivational place to achieve those goals. You must also have an investment strategy to work with. When you have a plan, your strategy must be comprehensible enough to enable you execute it. Here, we equip you with tools and resources that will help you achieve your goals.

Sometimes not everything goes as planned, so don’t feel discouraged. There is always room for improvement and as long as you do not let fear cripple you, you become like the heroes in Justice League who didn’t allow fear cripple them. They fought back and retrieved the mother boxes which brought back hope and unity to their community. Kick against your fears for beyond them lies greatness!

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Strategy is Key, Even at the Bus Stop

I was at the very popular Obalende terminal, when a slim lady, probably in her mid- 20’s, walked past me in a jolting manner. She carried a rather heavy bag, almost resembling the size of a 25 liter jerry can and managed to lift the daunting weight through the crowd. Her movement was rhythmic, almost as though she was walking the runway at a fashion show, and the next minute the rhythm would stop and she would continue in that jolting manner. Again, she would drop the bag, sit on the luggage for a short while, and then continue with the journey.

I watched her from the entrance of the terminal to where she was, and observed in more detail how she carried the bag, looked around and continued in the same jolting manner. I almost could not predict what she was going to do next, as almost immediately, she screamed loudly at the bus driver who was beckoning at her to hurry up.

What actually caught my attention was the similarity her display had to the stock market. I almost could not predict what she would do next and this is typical of what you get when trying to forecast the stock market. Stocks are turbulent and unpredictable in nature and it would take careful research and analysis to understand some market trends.

I was with my colleague from work and as we made our way into the bus, I noticed how occupied the bus was, almost full, to its maximum capacity, and how everyone was trying to rush into it to get a seat. To give you a clearer understanding, this bus plied my daily travel routes, was notorious for having nearly damaged seats and the decent seats were the ones directly behind the bus driver. We had waited faithfully for thirty minutes for the bus to arrive and in that time had calculated our strategy on how to get the desired seat that was not damaged or broken.

This is where my investment management training comes to play. When the bus arrives, we don’t just board it. We must have calculated how to achieve our goal, which is similar to what an investment counselor would do when working with his clients. Short term goal is to get the seats behind the driver, so we can sit comfortably on the way home and talk about work. Our long term goal is to stay abreast with the industry working out strategies on how to dominate the market.

Why do we refer to dominating? Well, while we are both innovative, analytical, and risk tolerant we also have liabilities. Our liabilities? We are both short sighted and wear glasses and coincidentally we both need a change of lens, as it is not clear enough to spy out the bus at a far range to keep us on our marks. I also do not have a huge body frame to push people out of the way and neither does my colleague have a face to scare people away.

Since we are both constrained by this liability, we have come up with our own little plan to achieve our goal. What we have is our strategy and this is what would see us through. As with every investment, strategy is key. Yes we hear it all the time that ‘past performance is not an indicator of future success’. This quote shows up after any promo for investment advice, which means that the past really isn’t a good indicator for the future. This does not mean that you should not have a strategic plan. Remember, strategy remains the key!

Sometimes it’s not easy to analyze these things and some critics would say that sector rotation in the stock market is rigorous. They say some stocks would win in one week and lose the next week and consumer staples would win in another week. Truth is it’s a vicious cycle but then again, it’s probably because they haven’t really been to the bus stops to see the number of people with hungry and tired bellies waiting to get home. The traffic to get through is a topic for another day, and the random nature of buses that arrive at the terminal daily is another thing to reckon.

Sometimes I feel the bus that I have placed my stake on doesn’t come often enough. The buses pull in at random but cannot leave the terminal till their seats get filled up, maybe because they came in too early. This is the same as stocks, they cannot rise without a catalyst, so also the bus drivers cannot leave the terminal until their buses are filled up.

Sometimes there are erratic drivers who would pick up a few passengers and then leave the terminal to pass through strange routes to avoid traffic. Just as an upgrade or tip of from an influential analyst can spark a run off in the stock market.

Other times , there would be fairly sane drivers who would remain calm until their buses get filled up and would pass the mapped out routes, thereby making the bus’ destination obvious. Just when I think that I have perfected my analytical and prediction skills, the bus develops a flat tire and the driver does not have a spare one.

Haha, there goes my prediction skills, I didn’t see that one coming!

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Passionate about football?? You'd make a Great investor!

The thought of investing in the stock market scares away lots of people. Many get nervous thinking about it like it’s some alien concept. This need not be the case. Chances are that you are already making investments in other areas of your life with a deep sense of commitment. The fundamentals are the same.

Following a football club is one of such areas. Have you ever encountered a circle of friends discussing the performance of their favourite team? They discuss with zeal. They spend a lot of time researching players, deciding which player will fit the team’s philosophy and recommending who the club should buy or sell in the next transfer window.

Some go as far as betting their lives on the outcome of games based on the confidence they have in their analytical skills.

If you find yourself deeply involved in football in this way, with the patience to follow through season after season then you already have what it takes to be a good investor.

Investing in stocks is not much different from investing your time following a football club. In following stocks, however your analysis and recommendations actually count - you’d no longer be frustrated with Arsene Wenger for not listening to you! More importantly you stand a chance of making money investing your time in analysing stocks.

A real football fan understands that football requires diversification and depth. While football is ultimately about scoring more goals than your opponent, a team with only good strikers but no strong midfield or defence has no good chance of winning trophies.

In the same way, a good stock portfolio needs to be diversified. It should have different stocks playing different roles to help achieve the ultimate goal of net gains. It should consist of different types of stocks - growth stocks as well as income stocks - in different industries.

You can think of the growth stocks as the strikers in football. These are stocks have a promise of high capital gains for your portfolio. They would typically be stocks with high price earning (P/E) ratio.

While it is good for a team to have high quality strikers, the team must be prepared to handle a counter-attack successfully so it doesn’t suffer a sudden loss while focused on trying to score lots of goals.

For this the team needs a reliable midfield and defence to fall back on. In the same way, your portfolio needs a fine selection of reliable stocks to fall back on when things get tough. These will usually be blue chip companies. They don’t necessarily promise high capital gains but their stability means your overall portfolio can stay sane when the market goes crazy. Also, stocks like this usually pay dividends regularly to give you a steady stream of income.

From time to time there is a need to strengthen the team by buying one or more new players. Each player is chosen after assessing the needs of the team, the players strengths, past performance etc. Sometimes the new player brings the expected change and fresh energy needed to improve the team, at other times the new player turns out to be a disappointment.

You have probably heard this quote many times: “Past performance is not an indication of future performance”. This is true in football as well as the stock market. One good example is a striker called Fernando Torres. He had an excellent scoring record one season at Liverpool FC, and was bought by Chelsea FC for a record fee the following season. Unfortunately, he failed to live up to the hype at Chelsea and hardly scored goals. He eventually had to be let go by Chelsea to make room for other strikers.

Some stocks may behave the same way when they are added to your portfolio. When this happens, you have to take the decisive step of cutting your losses and getting rid of them. This might be an important step to improve the overall health of your portfolio.

Although you can do a lot of planning, analysis and preparation, when it’s game time, chance becomes an important player. Some games are charged with more emotion than the norm, the referee can be in a mood to dish out cards for almost no reason and these factors can change to outcome of the game in unpredictable ways.

The stock market is not much different in this regard. There are times when unfounded rumours, panic and speculation drive things crazy and the script fails to go according to plan.

Fortunately, each season consists of very many games and there are a few trophies up for grabs. A few bad days are inevitable. The teams that are balanced and smart enough to consistently improve and adapt their game to changing circumstances will have a better chance of winning trophies.

Perhaps you have invested a lot of time and emotion in following your favourite football club simply for bragging rights. Why not channel that energy and enthusiasm to investing in stocks? You have what it takes to be a great investor!

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Tips for Nigeria investors

For those heavy on stocks, below are some of my opinions on current happenings and what I think you should be aware of (be prepared for, be not caught in a surprise about).

1. Global financial markets have been awash with cheap money and government funded assets purchase pushing assets value (bonds, equities, derivatives etc except a few commodities).

The result is that very many assets are selling at prices above their usual long term average

2. Frontier markets, where we fall in, have been somewhat insulated from these global assets over-valuation due to our uncorrelated risks factors -- political, commodity, currency etc.

However, due to the low activity levels of our financial markets, how much impact the foreign money movements (that are actually small in global relative scale) have in our markets and how little those movements correlate with actual fundamental values of our assets, our markets can be affected by these global markets issues.

3. Currently our stocks are fairly priced (not over priced as those in the developed markets) but still carry a considerable risk of going down due to the global assets sales US, EU and Japan central banks are embarking on.

These activities will jolt the market and most likely bring a price correction (a sort of painful reversal to mean) that often leads to foreign investors pulling money from emerging and frontier markets to "safe" assets like Gold, Bonds (especially as the US rates are rising).

Also, factor in the usual outflow around our election period.

4. If you are stocks heavy and might need to meet some financial obligations that may mean using some of your stocks money soon (technically speaking, less accommodating of volatility), you should rethink your portfolio now and do an optimal mix of assets type.

I am putting money I may need this year and next year in low volatile (actually, high-yield savings type) assets.

5. If you have foreign investment assets, then you need to take these current happenings really seriously. Think through the impact of a likely market correction to your investment assets and your ability to handle the outcome (losing or not losing your sleep).

Also, think about the opportunities that a market correction will present. That's my favourite part, the opportunity to buy cents on a dollar value.

6. We are fortunate in Nigeria. High ranking hedge fund managers, Vanguard fund managers and celebrity status investment managers in the developed countries seldom do as well as our money market returns.

Even, academic and research publications extolling the superior returns of stocks investing over other investing vehicles (real estate, bonds etc) always state that the S&P 500 has a long term returns of 9% annual rate.

To grow your money in Nigeria, you just need to have a good savings habit!

Yet we get way more than that in our money market. And with the magic of compounding that means your money doubles every 7 years for a 10% return rate and every 5 years for a 15% return rate. That is a very big thing that turns to pure magic if you save/invest periodically (monthly or quarterly). It is called the magic of compound interest.

So, to grow your money in Nigeria, you mostly just need to have a good savings habit.

And about the effect of inflation, in reality, it is not as terrible for an individual as it is often painted.

Beyond a few multiples of your autonomous consumption (living expenses), the effect is very muted for an individual. If you have N25 million growing at 10% yearly and your yearly living expenses are N1.5 million, even if inflation rate is 15%, it will take decade(s) before it will ever affect you.

The problem is if you borrow money, then the effect is greatly accelerated as you must pay positive real interest rate on the loans taken.

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How to teach your children to be investors rather than spenders

During my interaction with students in high school, I discovered that most teenagers are clueless about investing. They get an “A” for knowing how to spend money, and many work hard for income, but few know how or why they should invest in stocks, mutual funds, or index funds. Typically, most teenagers haven’t thought about building wealth by paying themselves first. This is a consequence of the wrong orientation about money.
Sometimes the biggest obstacle to making money is our perception. We believe investing is rocket science, or something that only professionals can do. By giving your children the confidence to manage and invest their own money, they can learn to be financially independent with the freedom to do what they want in life.
Do you want your children to be spenders or investors? In reality, they can be both. Before your children get their first credit card, show them how to make money work for them by investing.
Here are some actions you can take if you want your children to build wealth:
1. Teach them how to save: You can channel their cravings for material things like toys into an opportunity to learn how to save. You can provide piggy bank for them and encourage them to put out some amount of money periodically until the piggy bank is full. Then, they can go ahead to acquire whatever they want. I can remember vividly how we used to construct wooden containers popularly known as "save" mostly at the onset of the ember months. Then we save all the monies given to us by our generous uncles. During Christmas, we break open the "save" to know how much we were able to accumulate. Often we were astonished by the amount we saved. That singular act thought me the importance of savings. It equally increased my craving for investment. Kiddies find such ventures exiting.
2. Teach them with stories and pictures: Have you ever wondered why kiddies texts are filled with stories and pictures? The answer is not far fetched. They learn more when you tell them stories. To make the learning process more fun, you can use diagrams to illustrate the connection between savings, investment and financial prosperity.
3. Teach them the principle of compounding: the concept of money making more money was once regarded (by Albert Einstein) as the eighth wonder of the world. Kiddies should be taught how money "grows" through compound interest.
4. Keep it simple: It'll not make any sense to them if you start by  telling them about stocks, bonds, mutual funds etc. Rather, you can start by teaching them how they can save money and how to use the savings to have ownership stake in the company that produces their favourite toys.
4. Practice what you preach: Children learn a lot by observation. So, you can't be teaching them how to save and invest when you're financially irresponsible. You can't teach them how to be prudent when your spending and indulgence is out of control. Your lifestyle should be a lesson to them.
Indeed, the confidence and knowledge to invest is a critical gift to your children.

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If you can't save, please read this!

Ordinarily, savings means regularly putting aside a portion of the money you are given or earn in a safe place that pays interest.

We live in a society enmeshed in consumerism. Everyone crave for societal recognition by indulging in mindless acquisition. The importance of savings had been so relegated, especially among the youths. I keep wondering how far this generation can go in wealth creation with this poor attitude towards savings and investment. 

It is high time the young ones stopped believing that savings and investment are meant for parents alone. It is time to key into the financial system by adopting savings culture and other financial management techniques that would help secure our future. Imbibing sound financial principles at an early age would go a long way to help students and young ones manage their resources effectively, appreciate how money works and how it can be channeled to productive ventures now and in the future.

Saving money from early age guarantees financial independence, prudent management, planning and overall success of individuals and society.

The money saved should be placed in a financial institution for safekeeping and to earn interest on your money. But remember that the interest on your savings should be above inflation rate. This reduces the risk of spending, theft and gives your money the chance to grow. Savings is a precursor to investment. 

Conceptually, investment is the acquisition of assets (real or financial) for income generation and capital appreciation. I also consider intellectual property an asset. The economic growth of any society is hinged on the depth of investment of the people. On the other hand, the depth of investment is determined by the people's propensity to save. Any society with poor savings culture is doomed to remain in economic stagnation. Sadly, this is the situation in Nigeria. Our propensity to consume is on a stratospheric increase while our propensity to save is cascading rapidly. 

There is need for the young ones to change this tide. It's time we realize that economic growth is not determined by how much we make but how much we save. We can only invest when we have robust savings. It is impossible for a society without savings culture to grow. 

Fortunately, there are institutions with great commitment to drive and deepen prudent and effective management of resources among the populace, especially youths. Prominent among them is Investment One Financial Services. 

Investment One is a financial power house in Nigeria, a former investment arm of Guarany Trust Bank. They're registered with Securities and Exchange Commission as Fund managers and stock brokers. They have a number of financial products tailored for different category of investors. This investment bank is involved in securities brokerage, fixed income and mutual funds investment. These funds are invested in stocks and other money market instruments like government treasury bills, company commercial papers, FGN bonds, state development bonds etc. 

The following funds are professionally tailored to meet the needs of young Nigerians who are keen on preserving and stealthily growing their capital;

Abacus Money Market Fund is an open-ended Investment Scheme with competitive returns. A diversified portfolio with investments in quality money market instruments, short term debt securities, such as banker’s acceptances, Commercial papaers, and treasury bills.

The Investment One Vantage Balanced Fund (VBFUND) is a balanced mutual fund that was created to maximize long term capital growth and maintain regular income.These funds are invested in Equities, Fixed Income, Money Market and Real Estate.

In 2017 alone Abacus money market fund and Vantage Balance Funds  both managed by Investment One Funds Management returned 17 and 25 percent per annum respectively to their investors as interest income. Interest are paid on quarterly basis. There's also provision to reinvest earned interest.  No commercial bank can beat that. Most commercial banks pay between 3 and 4 percent per annum on savings account. 

 I enjoin everyone to key into this avenue provided by Investment One financial services to invest in our financial market and reap the benefits therefrom. Being a participant in our financial system provides an amazing opportunity to fully understand how the principle of compound interest works. It enables us to earn a decent income while learning financial management from a practical perspective. 

I want our youths, who are the hope and future drivers of Nigeria, to understand and appreciate the importance of prudent management of resources and other initiatives that have the capacity to positively impact lives and by extension, the society. This is to ensure their financial security and independence in future.

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You can't afford not to invest

If you are not investing you are giving away money, simple as that. If you have your money under your mattress, or in a save deposit box, this money is losing value. Why? As we all know, due to inflation. Most of the developed economies are pursuing monetary policies that try to achieve higher inflation rates, known as expansionary monetary policies.  Every single person that has an income should be investing a percentage of its money, period. If you have a salary and you are keeping all this money in your account without producing any return, you are not financial savvy, and what is worse, your bank is not doing you any favor by failing to educate you on the time value of money. So, if you don’t have anything invested… START NOW! You can thank me in when you see the power of compounding working miracles for you.

Investing is not a game, it is not science either. This is why statistics plays such an important role in investing (a topic that we will leave for a different post), and why no one should believe statements from financial advisers such as: “I assure you 10% annual return,” “This investment offers 5% annual return and is risk free,” and so on.

What I am trying to get across is that everyone that has an income should be investing, but that it is important to acquire a basic knowledge of the financial markets before doing so, even if you are going to go with a financial adviser, a private banker or any type of asset manager. Why? Because the most important person for each of us is ourselves, and if a money manager has to pick between the well being of himself and the one of the client, it will definitely pick himself. It gets worse if you are a medium or small investor, since your financial adviser will always fulfill the big client’s necessities before yours. So, to sum up we all need to have a basic understanding of the financial markets before starting to invest, this is the only way to shield our patrimony.

In this post I am going to provide the 10 most important points that you should have clear before you start investing.

1. Should you be investing?

I know that before I said “anyone with a salary should be investing,” but there are particular cases in which this might not be true, at least for some time. If you have debt at a high interest rate (almost all credit card debt will match this definition) you should pay it off entirely before even thinking about putting any money into the market. It is simple to understand why. If you owe money and the interests are, fore example, 10%, it doesn’t matter if you can invest in the markets and make an average return of 9%. You are still losing 1% in comparison with the situation in which you pay off all this debt. Now, if you have a mortgage with an interest payment of 3%, you should not pay off the whole mortgage before you start to invest. In this case you can make, using our previous example, 9% investing and only pay 3% interest for the mortgage. So you will make 6% more than if you just completely pay off the mortgage. The relationship is oversimplified in this explanation, for example that 9% return is not secured; it might vary depending on the market conditions, while the debt will still be due regardless. This is why a lot of radical risk-averse people would prefer to pay off the debt before investing, despite of proven fact that, in average, they are losing money. The second situation in which you should not invest, even if you have a salary, is that one in which you don’t have an emergency fund. Every rational person should keep some amount of money  in an account just to make sure that an adverse event does not challenge her financial situation and that she doesn’t need to pull money from her investments. However, if you are debt free, you have an emergency fund, and you have a salary… You better be investing!

  2. What are you investing for?
Are you investing to pay for your kid’s university, to buy a new car, to take that around the world vacation that you have always dreamt of, to enjoy a nice retirement, to have a passive income? As you can see, there are a limitless number of reasons to invest. You need to understand yours because depending on what you want to invest for; you are going to use different investment vehicles to achieve your goals. Let’s give a few examples to better understand it.
If you have a sizable amount of money and you want to leave of it, or just have it produce some income for you, you can buy dividend stocks and bonds that will assure you a stream of cash. If you get the right mix, you can enjoy a steady income over the years in order to use as you please.
If you meet the following criteria
You are in your 20s or in your 30s
You have an emergency fund
You have a salary
You are debt free
You don’t have the need to pull money out in the next decades
you should create a balanced portfolio with a high level of risk. Most likely it would include a high percentage of equities and a sizable exposure to emerging markets with a high growth potential.

3. There is no return without risk
No one, wait I’ll repeat: NO ONE is telling the truth if they say they can offer a return higher than the risk free with no risk. It is just not possible. In our post Risk in finance and the why of risk management  we gave a comprehensive explanation of what risk is and how to measure it, so take a look to refresh your mind.

4. You have an optimal risk target, find it!
In the investment world, you should not aim for a particular return; it is never the right strategy. The process should start by identifying your level of risk, and only then maximize the level of return for that particular level of risk. The real key variable is risk because at the end of the day, if you risk too much you might go bankrupt and you don’t want that! This is why we need to decide what level of risk is appropriate for us. How do we do it? We need to assess our risk profile. In most developed countries, registered financial advisers are required to assess the risk profile of their clients. These financial advisers will provide a questionnaire that will try to gauge the following characteristics of the investor:
Time horizon
Cash requirements
Attitude towards risk
Financial situation
At the end of the day what the financial advisers are trying to find out is what amount of money are you willing and able to lose within a particular level of probability. You should try to find this number before committing any money to the financial markets. It will be truly dangerous to invest in a vehicle in which you can lose more money than the amount you are comfortable with losing. As you can see, you not only have to understand your level of risk but also the different investment vehicles in order to know what is the risk of investing in them.

5. Diversification is key
In order to diversify you need to know about the different asset classes. We are currently building a database with as many possible investment vehicles that exist with their description and characteristics. For now, this are some of the most common investment vehicles, including alternative assets: stocks, bonds, derivatives, real estate, commodities, derivatives, hedge funds, venture capital, private equity…

6. Economies follow boom/burst cycles
Economies, as human emotions, rise and fall. Understanding how the economic cycle works, in which phase do we stand, and which type of companies and investment vehicles perform better in each particular phase of the cycle is completely crucial to perform in the investment world.

7. Always question your investment selection
Understand that if you are selling, someone is buying and that if you are buying, someone is selling. So, there is someone in the other side of the trade that is, on average, as smart as you. Try to find out why that person is taking the other side of the trade. In other words, take your strategy and try to see how it could go wrong and with what probability. This reflection might show you that your strategy is not as robust as you thought or it might give you even more reasons to invest, regardless; it is a necessary and sometimes forgotten step.

8. What is the cost of investing?
Now that we know our risk level and that we should diversify we need to focus in which investment vehicles we are going to use to create our portfolio. We cannot stress sufficiently how important the cost of an investment is for its final return, and how many times these costs are completely neglected by the investor. The costs come from different sources: brokers, financial advisers, investment vehicle, and others. You can understand how to minimize these costs and control them, and only then, it will make sense to invest.

You should always do the appropriate due diligence, find out how the fees of the different brokers, financial advisers and investment vehicles relate. This is substantial to realize the highest potential returns. The final, but not least important, type of cost that we should care about is the cost associated with taxes. Understanding the tax treatment of the different type of investment vehicles and their returns is key for investors.

9. There will be ups and downs
The markets are not gentle, be prepared. You might see green from the moment you start your portfolio, but most likely it will be a bumpy ride. The best strategy is not to continuously check how your investments are doing. This might make you sell at lows and buy at highs. You invested due to some reasons, and while the reasons that make you invest in something do not change you should not care about the short and medium term price action. History teaches us that in the long run a buy and hold strategy in a diversified portfolio should enjoy significant returns. Just to put an example, there is no 20-year period in the history of the NSE in which, after adjusting for inflation and accounting for dividend reinvestment, you would have had a negative return. I understand that the fact that this hasn’t occurred yet doesn’t mean it will never occur, but is just some nice food for thought. So, once you invest, stay patient and calm, try to keep emotions out as much as possible and only rebalance your portfolio once some change in the markets makes your portfolio inefficient.

10. Stay current with what’s happening in the world
There will be economical, political, environmental, social… and many other types of events that are going to be affecting your investments. It is really important that you understand what is happening in the different fields that affect your investments in order to understand what can happen to them. An early identification of a future trend can save you or make you a lot of money. Imagine that you have a lot of your money tied up to oil related investments. If suddenly a new energy is discovered that can displace oil due to its better characteristics, cost, quality, power, availability, environmental impact, accessibility… you might want to start limiting your exposure to oil, and the only way to find out about this type of news is by reading what’s happening in the world. I recommend to always read the news from different countries and also associated to different types of political affiliations because how some news are presented will be affected by the background of the news provider.
Keep on optimizing your strategies.

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Optimize your investment strategy with these tips

After the 2008-2009 consolidation in the banking sectors, there was a massive boom in the Nigerian Stock Market. This made a lot of people to invest in stocks. But not long thereafter, many of them lost their investments, because they were ill-prepared before dabbling into the market. To avoid making some of the mistakes you have to take heeds to some of these admonition before you invest in shares:

Seek advice

Working with a qualified financial adviser is one way to make a real difference to your wealth. An adviser can help you shape your investment goals and strategies and provide peace of mind when markets become more volatile. There are many investment bankers around who could be of help to you.

Educate yourself

Education they say is power. An informed investor is a good investor. So, be abreast with the happenings in the financial market. Get analysts’ reports on the shares you are planning to buy. Issues like changes to interest rates, currency movements and any geopolitical issues that have the potential to move markets must be of interest to you.

Keep an eye on fees

The fees you pay will affect the return you achieve from your investments. So make it your business to understand the fees you are paying on your investment as well as the fees you pay to your adviser. This little money often adds up to be substantial amount if you don’t keep tab on it.

Consider the impact of forex on your portfolio

Currency movements can have a significant impact on your overall return, both positively and negatively. Whether you choose to hedge your currency exposure will depend on your view of how the value of the currencies to which you are exposed will move. Some investors wish to be exposed to currency movements and others don’t. What is important is to work out which camp you are in and structure your investments accordingly.

Set your investment timeframe

It is easy to be caught up in short-term market moves. And if you like to trade assets on a short-term basis it’s important to keep a close eye on what is happening in markets at all times. But if you have a long-term view, avoid basing investment decisions on what is happening in markets right now. You should be concerned about long-term factors.

Buy when prices are down

Sometimes, it is a prudent strategy to buy quality stocks when their values are depressed because of short-term issues affecting the price of the stock. This can be a great time to buy. But make sure the business is not in a sector experiencing structural decline, satisfy yourself the problems are of a short-term nature only and make sure the business has the potential for long-term growth.

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Leadership: Why Nobody takes Nigerian Youths Seriously

The idea of Nigerian youths in politics and governance has been advanced by several youths and youth groups in recent times. The argument we made back then, remains the same today. The idea of youth as leaders of tomorrow has reduced a demographic majority to a political minority. What this means is that while the youths control the majority of votes cast during elections, they end up controlling nothing after politicians win elections.A close look at the history of Nigeria shows how much the youth have featured prominently in political leadership and governance. But in recent times, the story is not exactly the same.Shehu Shagari became a Federal Legislator at the age of 30 and a Minister at the age of 35. M.T. Mbu became a Minister at the age of 25 and Nigeria’s High Commissioner to the United Kingdom at the age of 26. Richard Akinjide became Minister of Education at the age of 32. Maitama Sule became Oil Minister at the age of 29. Audu Ogbeh was a Minister at the age of 35. He is still serving today as a minister. And the list goes on.In contrast, today’s reality is a polity where Nigerian youths are used as election consultants, social media battalions, and political thugs. Many have blamed the new trend on a conspiracy of the elite class who just cannot stand the idea of vacating the scene for the younger generation creating a system that makes it impossible for young people to emerge and succeed in politics and governance. While this perspective is not entirely incorrect, there are more than enough premises to validate the argument that Nigerian youths are their biggest problem.Greed, selfish ambition, lack of capacity and “over-competition” have conspired to weaken the ability of Nigerian youths to collaborate effectively as a united front that advances the well-being of young Nigerians.Let’s look at some of the challenges that have constrained the Nigerian youth to the fringes of political leadership and governance and why nobody really takes them seriously.First, selfishness. The idea that you must have everything for yourself alone and others can go to hell is a predominant characteristic of young people today.Then you have the integrity challenge. Young people cannot expect to be trusted with leadership if they insult politicians in the social media one moment and the next moment approach these same politicians cap in hand.The third is the mentality of every man for himself; the idea that you must demonize and destroy other youths as long as it guarantees you a spot at the top.Lack of capacity is another major issue. The urge by youths to arrive quickly at the top without first subjecting themselves to building capacity going through process; mentorship, followership, and apprenticeship. Today, many young people want to own a company and lead an organization, even when the capacity for such leadership is lacking.We must not forget poverty. Many youths are constrained by sheer economic pressure and find themselves ready to do anything for survival.Competition in place of healthy collaborations has turned many young people into rat race runners who feel compelled to prove a point that they are the best at what and end up not seeing any good in others.A recently disturbing trend is the rising wave of intolerance to dissenting viewpoints and ideologies. Come to the social media and see what young people are doing to themselves in the name of politics and the superiority contest to establish who holds the best opinion.The ‘Pull Him Down’ syndrome is a predominant characteristic of today’s youth. If it’s not me in that position, whoever else is there must be disgraced, embarrassed and pulled down.Frontline Nigerian blogger Linda Ikeji bought a house and the greatest noise came from young people like her. There was even a time attempts were made to take down her blog.Audu Maikori was arrested for a Facebook comment he apologized for and some youths in the Nigerian social media wanted him jailed.But on a serious note, these are reflections of what young people do to themselves in the name of competition and survival and these are the complicated symptoms that characterize why young people are failing to organize themselves effectively into a powerful bloc of change makers who can inspire true leadership beyond exploits in business and the creative industries.Looking at the concept of political participation and the way forward, it is instructive to note that Nigerian youths must wake up and face the reality that their votes on election day gives them enough power as youths. It is a necessary first step but it is more complicated than that.If you observe critically, you will discover that what most young voters are able to achieve on election day is to validate the options presented to the electorate by political parties. What this means is that the voter is not really the one who wields political power but the party people who decide the candidates we all vote for on election day. The far-reaching implication of this is that when party A and party B give us bad candidates, whichever candidate the majority decides ends up being a bad leader anyway.Going forward, the key to effective youth participation in politics and governance is to begin to get involved at the political party level. That is where all sort of characters we disdain as leaders first emerge. If we are not involved at the level of the parties where decisions are taken on the candidates presented to the electorate, the youths, despite their demographic majority, are unable to effect real change.But let me sound a note of warning. The advocacy for more youths in politics and governance does not automatically guarantee good governance. A corollary to the earlier context I provided is the fact that there are young people who are incompetent, dishonest and corrupt. I have been a passionate advocate of youth in politics and governance but I’m always quick to add that they must be young people with character, integrity, a pedigree, and a track-record. In Nigeria, we don’t look at track records anymore. We need to start really looking at people’s track records, what they have done and where they are coming from.Packaging and social media followership is the language of today’s generation, but it does not qualify you for leadership. Young people must start asking aspiring leaders, especially fellow youths: what have you done? Show us your resume.We must also encourage young Nigerians to build capacity first before parading themselves as superstars. There are no short cuts. A good number of our elders may have stumbled on leadership at a very youthful age, but increasingly, today’s reality requires competence and hard work.All youths cannot go into politics but many of them; the competent ones with character and integrity must get in there. And their fellow Nigerian youths must encourage and not demonize them.Conclusively, young Nigerians will need to also understand that as youths, we are not in a rat race competition. We can coexist to ‘coopete’ – working together even when we have different targets and aspirations. We all need to start looking at ways we can collaborate as young people across political divides. We must learn from the older generation and how they team up together to advance their interests. Enough of this politics of Party A versus Party B that has turned young Nigerians who were once friends into public enemies. This is the only way we can begin to win and change Nigeria together.

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Money mistakes to avoid this year

Making financial mistakes will leave you financially stagnant which is why you need to avoid it to achieve your financial goals in the New Year 2018.Here are five financial mistakes you must avoid in 2018

1. Living beyond your means. Living beyond your means while the little finance you have is going down the drain is really a drastic financial mistake you must avoid in 2018. Stop living beyond your means. If you keep living an expensive lifestyle you cannot maintain, you end up trying to borrow money from people to keep up with that lifestyle, which leaves you in serious debt and incurring debt is bad for your finances because your focus would be on paying your debt instead of focusing on your financial achievements

2. Taking risk you cannot afford. It is good to take reasonable investment and business risk but if you cannot afford such risks, don’t take such risks.Before taking risks, be sure it is worth it and make sure you can afford it.

3. Waiting to invest. Do not wait to have a large chunk of money before you think you can start investing.The best time to start investing is now. No matter how small the income, you should set some money aside for the sole aim of investingThe earlier you start investing, the faster and better you achieve your financial goals.

4. Not saving for retirement early. One of the worst financial mistakes is not saving and planning for retirement early in life.You might think planning and saving for retirement early is a waste of time because you have other financial obligations to meet but you might regret your decision in the future.The best time to start planning and saving for early retirement should be in your 20s when you are already earning an income.

5. Allowing money drain. It’s not a bad idea to enjoy yourself once in a while but if you make it a daily routine to spend so much money then you are making a big financial mistake.Stop wasting money. You should abstain from bad money habit that leaves you broke such as gambling or spending on impulse.Such habits don’t let you achieve your financial goals.

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